LV= notify s credit remains asset class of choice

By Jane Baird

LONDON (Reuters) - LV= Asset Management sees corporate credit as the asset class of choice now, even after a six-month rally, becaemploy of opportunities for gains in specific names in a period of gradual economic recovery.

"If you have a gradually paced recovery, rather than a sharp V (V-shaped recovery), credit remains a relatively attractive asset class," said Purna Bhudia, an LV= credit research analyst.

There is still room for marginal spread compression across the rating curve from now until at least the finish of the year, she said.

Equity label ets, meanwhile, have priced in growth that may not approach through, she said. "It depfinish s on your outgaze for the economy."

Going forward, spread tightening will be much less than in the past six months, she said. "We are recede ing to see decile basis point go ments rather than hundreds of basis point go ments."

The focus will be on picking single names.

LV=, a name-specific manager in the sterling label et, sees more price dislocation in the cash bond than in the derivatives label et.

It is now gaze ing at triple-B and execute uble-B rated companies as investors go execute wn the rating curve to acquire the most value, Bhudia said.  Continued...